While Tesla’s Elon Musk May Not Be Punctual, Big Auto Is Barely Crawling

Tesla Fremont factory, red Model S

DEC 18 2018 BY EVANNEX 23

FORMER TESLA STAFFER: CARMAKERS WEDDED TO OLD TECH ARE ‘HEADED FOR OBSOLESENCE’

Elon Musk is consistently accused of being late. Sure, Tesla typically takes longer to launch its electric cars than Musk’s overzealous timelines. But no one can argue with his sense of urgency to expedite EVs to market. On the other hand, how are legacy automakers faring in their race to go electric?

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Author Hamish McKenzie and his new book, Insane Mode: How Elon Musk’s Tesla Sparked a Revolution to End the Age of Oil (Image: Marketwatch)

According to a former Tesla staffer, Hamish McKenzie, and author of Insane Mode: How Elon Musk’s Tesla Sparked a Revolution to End the Age of Oil, “Other car companies, from General Motors to BMW aren’t showing the same sense of urgency — and that could be their downfall.” For instance, “GM has promised 20 electric models by 2023 and has said it believes ‘the future is all-electric,’ but it hasn’t set a date by which it will make the full transition.”

McKenzie writes in Marketwatch that “trends from Tesla alone should be enough to scare the hell out of established automakers. In August, Tesla’s Model 3 comfortably outsold the perennially best-selling BMW 3-Series in U.S. according to sales estimates. That’s impressive for Tesla’s first foray into the premium mass-market segment, but it’s only just getting started. The cheapest version of the Model 3 is yet to come, and Tesla still has hundreds of thousands of back-orders to fill. Last quarter, Tesla made twice as many cars at it did in the previous quarter. And it’s now profitable.”

Above: A look at one of Tesla’s Superchargers (LinkedIn: Hamish McKenzie)

Meanwhile, “Other automakers seem to be hoping that mild gestures and good publicity will get them through… The problem for traditional automakers is that they are too deeply wedded to an old technology headed for obsolescence — along with the way they’ve been doing business for decades.” As an example, McKenzie points to “BMW [which] has announced plans for 25 electric models by 2025, but its head of research and development has said he expects 85% of the company’s cars will still have internal combustion engines in 2030.”

McKenzie sat down with Carsten Breitfeld who previously ran BMW’s i3 and i8 electric car programs. According to Breitfeld, “They’re doing too many cars right now with the old technology, earning a lot of money out of it, being very profitable.” The board directors at these companies are focused on three-to-five-year outcomes instead of the long term, says Breitfeld. “They’re concentrating very much on today’s and tomorrow’s businesses.”

Above: A look at Tesla’s luxury sedan, the Model S (LinkedIn: Hamish McKenzie)

At the end of the day, McKenzie explains, “The established automakers still have a chance of participating in an electric revolution, but those who assume they will be there by default are being overly optimistic. The car company of the future is not one that can produce the occasional good electric car among a suite of gasoline-burners. It must concentrate on developing cars that will dominate the next 20 years. The longer it waits, the greater the challenge becomes. Ask yourself who you’d rather be: Tesla or GM? Better yet, ask Nokia.”

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Source: Marketwatch

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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23 Comments on "While Tesla’s Elon Musk May Not Be Punctual, Big Auto Is Barely Crawling"

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Nissan came out guns blazing with the Leaf and now find themselves out of US tax credits after delivering a flawed product to their customers. They will not be able to compete with Hyundai and VW who still have their credits for the next couple of years. Seems to me that it was prudent to wait it out for strategic purposes.

Nissan isn’t close to running out of US tax credits. They’ve been selling the Leaf for over 9 years at this point, and they only have sold 127K Leafs in the US so far (so 127K/9 ~=14.1K/year). That means they’ve got (200 – 127) / 14.1 ~= 5.2 years until they hit 200K.

More likely, I think that 200K cap is going to go away entirely – it’ll be shifted to a shared pool of credits where all makers are fighting over it, or a straight forward deadline.

That headline is spot on. Thank you.

The article is definitely from a Tesla POV, which conforms to the idea which is similar to the China cultural one. ‘We are the center of the earth and everything of cultural value’ must be judged in relation to that benchmark. In other words, a headlong dash and damn the torpedoes – which has resulted in plenty of Tesla’s self inflicted wounds. This has nothing to do with the ultimate quality of Tesla’s products (obviously arguable unless for a fanboy) and EVERYTHING to do with company culture. GM is the epitome of nonTesla culture and yet it has engineered and built quality EVs on a timeline. The development has been a straight line towards EVs and product goals. It doesn’t have to beat the drums. It just performs. On the other hand, GM doesn’t have to abandon profitable vehicles to other companies to keep the faith on EVs. That is basically a customer market problem – and to a great extent a political problem in terms of policies. If customers felt policies were going to fully support EVs it would be easier to market them in greater numbers. Tesla’s POV that it’s ‘carrying the water’ is often a PR priority… Read more »

“Elon Musk May Not Be Punctual” hahaha, very nice

I got a chuckle out of that, too, though it’s Tesla specific. How about “While Tesla’s guaranteed to be late …”

I was thinking about this topic the other day and it is interesting to consider the least prepared companies and how they got there. Of the major automakers it seems Ford and Fiat/Chrysler are about as behind as you can get. The funny thing is Ford had some cars and SUVs that were at least OK development platforms to learn about making EVs (i.e., motor, packaging and control system technologies). They had one of the first hybrid SUVs with the Escape. In 2009 they had the hybrid Fusion that was decent for it’s day, though the PHEV was kind of a joke with the trunk being basically useless. Focus EV and C-max. Now it is pretty much crickets chirping over there. GM has shown they have some of the skills to make a good EV, but it almost looks like they are trying to re-trench and double down on pickups. Fiat is Fiat. They seem completely satisfied to ride the Jeep brand and pickups for as long as that will hold out. Next on the list is probably Honda and Toyota. Honda’s little Civic EV will be kind of interesting, but that thing is already outdated if it doesn’t have… Read more »

Never seen a civic EV

Hydrogen is for their home market

I am not sure the home market will sustain fuel cell cars. You have all the same development cost and a much smaller market.

Their “Civic EV” is the EV they have shown that looks like the 1980s Civic. I don’t think that is what they call it though.

Fiat has a new line of fiat 500 ev’s comming. The current fiat 500e is a very good car, just wish it has had a longer range.

Mazda is way back there too, with them saying there’s lots of life in ICE and dragging out an EV plan to only 5% in the 2030s.

Let’s see Tesla make 2 new products at once for mainstream price and if it’s sales like the 3 ? That’s what I’m 👏👏👏👏👏👏 when they have proven that they are going to kill the legacies

I think EVANNEX is really damaging the Tesla brand. They stole the arrogance of big auto and project it onto Tesla.

I think Tesla’s lead in ev introduction has actually increased, as they continually move forward as others fall behind.
To say the Model 3 is a game-changer is apparent, with many legacy makers abandoning their children (cars) by the roadside or in parking lots, because they can’t be sold.
Its’ disruption on a grand scale, precipitated by a single company.

For example the article mentions GM as saying they are coming with 20 electric models by 2022, since it was announced in 2017 Oct, which won’t happen, or anything of an approximate nature. In fact GM a year after their 5 year plan, is discontinuing the Volt, so they are one down, and far from their announced goals.
Others are coming out with cars in compliance numbers, or limited delivery areas, in the next few years, but nothing near the scale of the Model 3, nor the proposed Model Y. Those low numbers and limited availability will continue for many years as legacy auto continues to make diesels, ice, and phevs, that will seem even more archaic than they do now. Even more lots will fill up with cars nobody wants and that get sold, if at all, to dealers for almost nothing, so they can sit on their lots. Also the coming downturn will not help much with plant closings and lay-offs, and the precipitous decline of the legacy auto industry.

Remember Ford’s replacement for the CMAX should have been on sale right now.
PR is cheap.

“BMW [which] has announced plans for 25 electric models by 2025, but its head of research and development has said he expects 85% of the company’s cars will still have internal combustion engines in 2030.”

Futurists like Kurzweil and Seba have been predicting for almost a decade now that 2025 will be the tipping point. EV cars will outsell ICE cars way before 2030. And some EVs are already TCO superior to equivalent ICE models. Once the avalanche starts, it will be only a decade or so until ICE is going bye-bye. Already, ICE sedans are on the downturn. Some say it is because of CUVs taking market share, but, an alternative view is that the customers are in a holding pattern until EVs that meet their needs are here.

BMW et al are doomed. Do. Or Do not. There is no try.

Back to the book! ICE sales are heading…..nowhere! It’s 2023..You are young and heading to your peak earning income years. You’ve made that beater ICE car last forever. Like all the other 20 to 40 year olds, you now want an EV and now there’s lots to choose from! Oil prices plummet, ICE sales plummet, EV sales soar.

OIl inventories are high now, and price is falling, and forcing oil to reduce CAPEX for next year.
( It’s already happening. )

Bloomberg article seems to confirm this:

In the Switch to Electric Vehicles, Expect a Few Giants to Crash
Some of the biggest automakers might not make it safely into the all-electric future.

https://www.bloomberg.com/news/articles/2018-12-18/in-the-switch-to-electric-vehicles-expect-a-few-giants-to-crash

I don’t expect any major auto companies to go out of business because of Tesla, but I do expect Tesla to enjoy first mover for quite a while. People are complaining about EV costs and limitations. They seem to forget the personal computer arrived in 1983. I didn’t purchase one until I think 1994. A Gateway computer with 4 MB’s of Ram and a 40 MB hard drive. With the monitor and keyboard it cost I think around $3,000. So the EV industry is growing much more rapidly and Tesla with EV’s and storage is going to grow revenue by 30-40% for at least the next 5 years.

Surely this will prompt the short sellers to short ICE-carmakers.